BNP Paribas, one of Europe’s largest banks, is reshaping its sustainable finance strategy to prioritise profitable investments while redefining its approach to sustainability. According to Constance Chalchat, Chief Sustainability Officer of the bank’s Corporate and Institutional Banking (CIB) division, the move is aimed at ensuring long-term relevance and aligning environmental, social, and governance (ESG) goals with financial returns.
“We want to remain relevant for the long run, even for US investors, and to realign profitability and sustainability,” Chalchat stated, reflecting the bank’s renewed focus on sustainable finance that supports both business growth and climate action.
The rethinking of ESG investments comes as financial institutions face growing scepticism about their effectiveness. Subpar returns on ESG-focused investments, coupled with mounting political pressure—particularly in the United States—have prompted many banks to reassess their strategies.
US President Donald Trump has been vocal in opposing ESG initiatives. In recent days, he has accused major banks of bias against conservative clients, heightening the political tensions surrounding sustainable finance.
The geopolitical landscape, including the energy crisis triggered by Russia’s invasion of Ukraine, has further complicated the situation. These factors have led several global banks to withdraw from key climate coalitions. BNP Paribas, however, remains committed to its membership and broader climate goals, even as it refines its approach.
As a leader in aligning its business operations with the Paris Agreement, BNP Paribas has made notable changes to its climate finance policies. In 2022, the bank announced it would no longer arrange bond deals for the oil and gas sector. Now, it is pivoting towards four key sustainability themes: adaptation, transition, conservation, and societal resilience.
Chalchat explained that BNP Paribas plans to broaden its definition of sustainability to include decarbonising high-emission industries such as steel and cement. The bank is also prioritising investments in water management, agribusiness, and adaptation finance—areas it believes can generate both strong financial returns and significant environmental benefits.
“We believe these areas can deliver financial performance while supporting the planet’s resilience,” Chalchat said, emphasising a shift away from rigid exclusion frameworks that could hinder performance.
Investor interest in thematic opportunities, particularly in renewable energy, water, and health, is on the rise. A BNP Paribas survey conducted in September found that over half of equity investors intend to increase their focus on these sectors. This growing demand aligns with the bank’s new sustainability priorities.
By refining its strategy, BNP Paribas aims to support companies that contribute to a sustainable future while delivering robust returns for investors. The bank’s approach is a calculated response to the evolving dynamics of global finance, climate action, and political pressure.
